Tips and resources to help you manage your financial life

What to teach your child about money – Part 2

Last week, we went over some money lessons to teach your kids at a young age. This week, we will discuss how to maintain a good financial foundation and continue good money habits for your child as he or she grows into the age of 10-13.

Teaching your older child good money habits involves more complex concepts and lessons. But parents shouldn’t be too worried: These lessons simply build on the basic foundation you have taught your child in the earlier years. They can also be learned through activities that are fun and engaging for your 10-to-13-year-old. Here are some examples:

Banking basics – Trips with you to the bank will be opportunities for your child to observe and learn to do basic bank transactions. Explain your purpose each time (making a deposit, paying a bill…) so your child can associate each specific process. It is also the time to make a transition from piggy bank to an actual savings account. With this account he or she can practice hands-on how to make deposits and use a bank book.

At 10 to 13, your child is using money to make purchases. Make sure to teach him or her the value of money!

Save a dime for every dollar you earn– Reinforce the importance of saving by setting a certain portion of “earnings” to go toward savings. Connecting this lesson neatly with the lesson on banking, point out to your child the benefit of saving early and frequently through a saving account: You can see your money “grow” over time.

Be a savvy shopper – The familiar groceries shopping trip can now become more interactive. Involve your child in buying decisions and making the grocery list. Let him or her actively compare prices and value of different items at the store. At times, you can hand your 10-to-13-year-old a small amount of money to go shopping on his or her own, then discuss afterward how he or she has done.

Money is hard earned – It is the time for lemonade stands and the neighborhood dogsitting service! Not only are these activities exciting, through them your child learns how to actually “earn” money for himself or herself. You can also tie in a goal – making enough (after putting 10% to savings) to buy something he or she has wanted, for example – to more clearly demonstrate that money is made through hard work.

Credit is money you borrow, not what you have – Whether or not you have decided to let your child start using a credit card at this age, it is important to teach your child this basic concept of credit.

Never share personal information online – While your child might be more computer-savvy than you are, he or she likely is not yet aware of the danger of identity theft. Make sure to tell him or her on several occasions never to give information like phone number, home address or any “personal numbers” (bank account, Social Security number) to any sources or requests from the Internet.